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OpenBand v. Lansdowne, No. 12-1925 (4th Cir.)

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Released: October 15, 2012

AMICUS BRIEF FOR THE FEDERAL COMMUNICATIONS COMMISSION
IN SUPPORT OF APPELLEE
IN THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

NO. 12-1925

OPENBAND AT LANSDOWNE, LLC, ET AL.,
APPELLANTS,
V.
LANSDOWNE ON THE POTOMAC
HOMEOWNERS ASSOCIATION INC.,
APPELLEE.

ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF VIRGINIA


SEAN A. LEV
GENERAL COUNSEL

PETER KARANJIA
DEPUTY GENERAL COUNSEL

JACOB M. LEWIS
ASSOCIATE GENERAL COUNSEL

MATTHEW J. DUNNE
COUNSEL

FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740


TABLE OF CONTENTS


TABLE OF AUTHORITIES .................................................................................... ii
STATEMENT OF INTEREST ...................................................................................1
STATEMENT OF FACTS ........................................................................................2
I.
BACKGROUND .............................................................................................2
A. THE 1992 CABLE ACT AND THE TELECOMMUNICATIONS
ACT OF 1996...........................................................................................2
B. EARLY FOCUS ON MDU EXCLUSIVITY...................................................3
C. THE EXCLUSIVITY ORDER ........................................................................5
II. THIS CASE ...................................................................................................7
A. PARTIES AND AGREEMENTS....................................................................7
B. DECISION BELOW .................................................................................11
SUMMARY OF ARGUMENT ................................................................................13
ARGUMENT.......................................................................................................14
I.
THE EXCLUSIVITY ORDER FORBIDS EXCLUSIVE
ARRANGEMENTS LIKE THOSE AT LANSDOWNE...........................................14
A. THE EASEMENTS COMPLETELY PREVENT COMPETITION BY
OTHER VIDEO PROGRAMMERS. ..............................................................14
B. THE ORDER REACHES EASEMENTS LIKE THOSE AT ISSUE.......................15
II. OPENBAND AND ITS AFFILIATES FALL WITHIN THE
EXCLUSIVITY ORDER AS AN OVS OPERATOR. ............................................18
CONCLUSION ....................................................................................................21
i

TABLE OF AUTHORITIES

CASES


CGM, LLC v. BellSouth Telecomms. Inc., 664 F.3d
46 (4th Cir. 2011) ................................................................................. 12, 13
Chesapeake & Potomac Tel. Co. of Maryland v.
Pub. Serv. Comm’n of Maryland, 748 F.2d 879
(4th Cir. 1984), vacated on other grounds, 476
U.S. 445 (1986) ...........................................................................................13
City of Dallas v. FCC, 165 F.3d 341 (5th Cir. 1999)........................................3
Columbia Broadcasting Sys., Inc. v. United States,
316 U.S. 407 (1942) ....................................................................................13
Nat’l Cable & Telecomm. Ass’n v FCC, 567 F.3d
659 (D.C. Cir. 2009)......................................................................................7
Nat’l Cable & Telecomm. Ass’n v. FCC, 89 Fed.
Appx. 743 (D.C. Cir. 2004)...........................................................................5
Talk Am. v. Mich. Bell Tel. Co., __ U.S. __, 131 S.
Ct. 2254 (2011)..............................................................................................2

STATUTES


47 U.S.C. § 153(53) ..........................................................................................9
47 U.S.C. § 401(b)...........................................................................................13
47 U.S.C. § 521 nt. ............................................................................................2
47 U.S.C. § 541(a)(1) ........................................................................................2
47 U.S.C. § 548 .................................................................................................2
47 U.S.C. § 573 .................................................................................................3
47 U.S.C. § 573(c)(1)(A). .................................................................................3
REGULATIONS
47 C.F.R. § 76.1500(a) ....................................................................................19
47 C.F.R. § 76.1500(b)............................................................................... 3, 19
47 C.F.R. § 76.1500(f) ....................................................................................19
47 C.F.R. § 76.2000 ......................................................................................1, 7
ii

47 C.F.R. § 76.2000(b)......................................................................................4
47 C.F.R. § 76.5(ff) .........................................................................................19

ADMINISTRATIVE DECISIONS


Exclusive Service Contracts for Provision of Video
Services in Multiple Dwelling Units and Other
Real Estate Developments
, 22 FCC Rcd 20235
(2007) (Exclusivity Order) .................................................................. passim
Exclusive Service Contracts for Provision of Video
Services in Multiple Dwelling Units and Other
Real Estate Developments
, 22 FCC Rcd 5935
(2007) ............................................................................................................5
Implementation of the Cable Television Consumer
Protection and Competition Act of 1992, 13 FCC
Rcd 3659 (1997) ............................................................................................4
In re Telecommunications Services Inside Wiring,
Customer Premises Equipment and
Implementation of the Cable Television
Consumer Protection and Competition Act of
1992: Cable Home Wiring
, 18 FCC Rcd 1342
(2003) ............................................................................................................5
OpenBand Multimedia, Inc.: Certification to
Operate an Open Video System, 15 FCC Rcd
24153 (2000) .................................................................................................8

OTHER


Comments of AT&T Inc., Exclusive Service
Contracts for Provision of Video Services in
Multiple Dwelling Units and Other Real Estate
Developments
, MB Docket No. 07-51 (July 2,
2007)............................................................................................................16
Comments of OpenBand Multimedia, L.L.C.,
Exclusive Service Contracts for Provision of
Video Services in Multiple Dwelling Units and
Other Real Estate Developments
, MB Docket No.
07-51 (July 2, 2007) ............................................................................... 6, 17

iii

IN THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

NO. 12-1925

OPENBAND AT LANSDOWNE, LLC, ET AL.,
APPELLANTS,
V.
LANSDOWNE ON THE POTOMAC
HOMEOWNERS ASSOCIATION INC.,
APPELLEE.

ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT
OF VIRGINIA

AMICUS BRIEF FOR THE FEDERAL COMMUNICATIONS COMMISSION
IN SUPPORT OF APPELLEE

STATEMENT OF INTEREST

Pursuant to Rule 29(a) of the Federal Rules of Appellate Procedure, the
Federal Communications Commission respectfully submits this brief as
amicus curiae. This case involves review of a district court’s interpretation of
an FCC Order and rule. See 47 C.F.R. § 76.2000; Exclusive Service
Contracts for Provision of Video Services in Multiple Dwelling Units and
Other Real Estate Developments, 22 FCC Rcd 20235 (2007), 73 Fed. Reg.
1080 (Jan. 7, 2008) (“Exclusivity Order”) (adopting 47 C.F.R. § 76.2000).

The FCC has an interest in ensuring that its regulations and precedents are
correctly interpreted, and that its fair and considered interpretive views are
accorded due deference, even when embodied in an amicus brief. See Talk
Am. v. Mich. Bell Tel. Co., __ U.S. __, 131 S. Ct. 2254, 2260-61 (2011).

STATEMENT OF FACTS

I.

BACKGROUND

A. The 1992 Cable Act and the Telecommunications Act of

1996.
Concluding that “most cable television subscribers have no opportunity
to select between competing cable systems,” Congress in 1992 enacted a
number of measures designed to promote competition and diversity of
sources of information in the pay-TV market. Cable Television Consumer
Protection and Competition Act of 1992 (“1992 Cable Act”), P.L. 102-385,
§ 2(a)(2), 47 U.S.C. § 521 nt. Among other things, Congress forbade local
franchising authorities from granting exclusive franchises, 47 U.S.C.
§ 541(a)(1).
As part of the 1992 Cable Act, Congress also enacted 47 U.S.C. § 548
(often referred to as section 628, for its placement in the Communications
Act). Designed “to promote the public interest, convenience, and necessity
by increasing competition and diversity in the multichannel video
programming market, to increase the availability of satellite cable
2

programming and satellite broadcast programming to persons in…areas not
currently able to receive such programming, and to spur the development of
communications technologies,” section 628 makes it
unlawful for a cable operator…to engage in unfair methods of
competition or unfair or deceptive acts or practices, the purpose
or effect of which is to hinder significantly or to prevent any
multichannel video programming distributor from providing
satellite cable programming or satellite broadcast programming
to subscribers or consumers.
1
47 U.S.C. §§ 548 (a)-(b).

B. Early Focus on MDU Exclusivity.

After the passage of the 1992 Cable Act, and in light of the as-yet
meager inroads made by would-be competitors to incumbent cable operators,
the FCC began a series of rulemakings to foster competition among
multichannel video programming distributors (“MVPDs”). Among these

1 Although the statute refers to “cable operators,” it is also made applicable
to OVS operators under 47 U.S.C. § 573(c)(1)(A). An OVS operator is “[a]ny
person or group of persons who provides cable service over an open video
system and directly or through one or more affiliates owns a significant
interest in such open video system, or otherwise controls or is responsible for
the management and operation of such an open video system.” 47 C.F.R.
§ 76.1500(b). An open video system, or OVS, is a regulatory classification of
video programming distributor created by the 1996 Act. See 47 U.S.C. § 573;
City of Dallas v. FCC, 165 F.3d 341, 346 (5th Cir. 1999). An OVS is similar
to a cable system except that, in exchange for reserving platform space for
unaffiliated programmers, OVS operators are freed from certain regulations
applicable to cable operators. Id.

3

measures were rules focusing on MVPDs that service multiple dwelling units
2
(“MDUs”). See, e.g., Implementation of the Cable Television Consumer
Protection and Competition Act of 1992, 13 FCC Rcd 3659 (1997) (making it
easier for an MDU owner to switch to another MVPD and for a competitor
MVPD to install wiring in a building already wired by an incumbent MVPD).
During these rulemakings, a number of providers raised the issue of exclusive
service contracts between MDU owners and video service providers. Phone
companies and other providers seeking entry into the MVPD market argued
that these exclusive contracts with MDUs forstalled competition by
restricting access to customers. In 1997, the FCC sought comment on
whether and how to limit those exclusive arrangements. Id. at ¶¶ 191-
192, 259.

2 FCC rules define MDU to include “an apartment building, condominium
building, or cooperative” as well as “other centrally managed real estate
development[s]…such as a gated community, mobile home park, or garden
apartment.” 47 C.F.R. § 76.2000(b).
4

C. The Exclusivity Order


In 2003, the Commission found that the record at that point reflected
3
“both pro-competitive and anti-competitive aspects of exclusive contracts.”
Because the FCC could not conclude, based on the available record, that
exclusive contracts between MVPDs and MDU owners were predominately
anti-competitive, it declined to forbid them at that time. Id.
However, in early 2007, spurred in part by comments in another
proceeding that analogized cable/MDU exclusive access agreements to the
entry barriers posed by the local franchising process, the Commission
4
initiated a renewed examination of the issue. A host of entities filed
comments, including large and small cable companies, other types of
MVPDs, builders and managers of MDUs, consumer groups, and
programming consumers. Exclusivity Order ¶ 6. Among these was
OpenBand Multimedia, L.L.C., which argued that its “exclusive contracts”
were essential to its ability to recoup investment. Comments of OpenBand

3 In re Telecommunications Services Inside Wiring, Customer Premises
Equipment and Implementation of the Cable Television Consumer Protection
and Competition Act of 1992: Cable Home Wiring
, 18 FCC Rcd 1342 ¶ 71
(2003), remanded in part, Nat’l Cable & Telecomm. Ass’n v. FCC, 89 Fed.
Appx. 743 (D.C. Cir. 2004).
4 See Exclusive Service Contracts for Provision of Video Services in
Multiple Dwelling Units and Other Real Estate Developments, 22 FCC Rcd
5935 ¶¶ 4-5 (2007).
5

Multimedia, L.L.C. at 3-4, Exclusive Service Contracts for Provision of Video
Services in Multiple Dwelling Units and Other Real Estate Developments,
MB Docket No. 07-51 (July 2, 2007) (“OpenBand Comments”); see
Exclusivity Order nn.72, 76-77, 104, 116 (citing OpenBand Comments). In
contrast, many commenters stressed the competitive harms that stem from
exclusivity, including holding back competitors from offering video
programming or a “triple play” of video, phone, and broadband service. See
Exclusivity Order ¶ 17-23. The Commission also noted harms to consumers,
especially because an exclusive right may be granted by the developer of an
MDU with interests that diverge from the residents who will later live there.
Id. at ¶ 22.
On this record, in 2007 the Commission unanimously adopted the
Exclusivity Order. That order concluded that contracts granting cable
operators exclusive access to MDUs “harm competition and broadband
deployment and that any benefits to consumers are outweighed by the harms
of such clauses.” Exclusivity Order ¶ 1. The adopted rule states:
No cable operator or other provider of MVPD service subject to
47 U.S.C. § 548 shall enforce or execute any provision in a
contract that grants to it the exclusive right to provide any video
programming service (alone or in combination with other
services) to a MDU. All such exclusivity clauses are null and
void.
6

47 C.F.R. § 76.2000. The Commission explained that, in adopting the rule, it
intended to reach those “exclusivity clauses” that “prohibit any other MVPD
from any access whatsoever to the premises of the MDU building or real
estate development.” Exclusivity Order ¶ 1 n.2.
The U.S. Court of Appeals for the D.C. Circuit upheld the Exclusivity
Order in 2009, finding it “well within the bounds of both section 628 and
general administrative law.” Nat’l Cable & Telecomm. Ass’n v FCC, 567
F.3d 659, 661 (D.C. Cir. 2009). In so doing, the court rejected the argument
that the rule “impermissibly regulates the real estate industry, which lies
outside the Commission’s jurisdiction,” explaining that the terms of the rule
“apply only to cable companies…and they neither require nor prohibit any
action by MDUs.” Id. at 666-667 (“We decline to put issues relating to
[MDU residents’] cable service outside the Commission’s authority simply
because those issues also matter to their landlords.”).

II.

THIS CASE

A. Parties and Agreements

In 2001—four years after the FCC first announced that it was
reviewing the permissibility of exclusive arrangements in MDUs—appellants
entered into a series of agreements with appellee regarding video
programming and other utilities for Lansdowne on the Potomac, a planned
7

community in Loudoun County, Virginia. Op. at 3-9. Because of their
importance to this case, we discuss these agreements in some detail.
First, the developer of Lansdowne in conjunction with appellant M.C.
Dean, a technical services contractor that specializes in communications
5
systems, jointly established OpenBand at Lansdowne LLC (“OpenBand”).
Op. at 3. The developer also established appellee, Lansdowne on the
Potomac Homeowners Association, Inc. (“Lansdowne HOA”). Id. While the
developer still controlled the HOA, the developer, the HOA, and OpenBand
then entered into a series of agreements related to the provision of video
programming, Internet services, and telephony:
Agreement to Obtain Telecommunications Services (“TSA”)
OpenBand and Lansdowne HOA signed a contract in which OpenBand
agrees to “be the provider or arrange for the provision of the Platform
Services,” defined to include video programming as well as Internet and

5 The developer no longer has an interest in OpenBand. Op. at 3 n.3.
OpenBand, which has no employees of its own, has entered into an
agreement with another M.C. Dean entity, OpenBand Multimedia, LLC
(“Multimedia”), for the provision of video programming and Internet services
at Lansdowne. Op. at 4. Multimedia is certified by the FCC as an open video
system (OVS) operator. See OpenBand Multimedia, Inc.: Certification to
Operate an Open Video System
, 15 FCC Rcd 24153 (2000) (“OpenBand OVS
Certification
”).
8

6
wireline telephone service. Complaint, Exh. 1 § 2.1 (“TSA”). Lansdowne
HOA is prohibited from engaging another provider for Platform Services, but
the TSA states that individual residents may obtain services, including
7
Platform Services, from other providers. Id. § 2.2.3.
Exclusive Easement for Telecommunications Services—In documents
signed the same day, the developer granted an “exclusive easement” to
OpenBand for the purpose of constructing and operating (“Administering”)
the infrastructure necessary for the provision of “video, telephonic, internet,
data services or other communications” (the “Utilities”). Complaint, Exh. 3
8
§ 2(a) (“OpenBand Easement”). That document states that these “exclusive
easements” shall “be deemed to reserve solely to Grantee” (i.e., OpenBand)
these rights, and that “no other person or entity shall be entitled to Administer
any Utilities on, under or across [the Lansdowne development] without the

6 The term “Telecommunications Services” in the TSA and easements
includes Internet and video programming services and so has a broader
meaning than that term under the Communications Act. See 47 U.S.C.
§ 153(53).
7 As explained below, residents’ right to obtain alternate services is illusory
because of OpenBand’s exclusive easement. See infra Section I.A.
8 This conveyance was accomplished through two separate easements—one
conveying between two entities owned by the developer and a second,
executed the same day and essentially identical in structure, conveying this
interest to OpenBand. See Complaint, Exhs. 2, 3.
9

written consent of the Grantee.” Id. § 8. The parties then set out a covenant
in the easement:
[Developer] and [Lansdowne HOA] covenant that for the
duration of this Easement they shall not grant any easements to
Administer any Utilities on, under or across the Property,
provided that [developer] and [Lansdowne HOA] shall have the
express right to grant or assign other utility easements on the
Property not inconsistent with the exclusive rights of Grantee
herein.
Id.
Convenants, Conditions, and Restrictions (“CC&Rs”)—In the
CC&Rs, signed about one month later, the developer declared a variety of
rights and restrictions on the use of the property that would become
Lansdowne. Among these, the CC&Rs repeatedly restrict Lansdowne HOA
and residents from taking actions or granting easements inconsistent with
9
OpenBand’s “exclusive” easement or right.

9 See Complaint, Exh. 6 at § 3.8(e) (“CC&Rs”) (HOA may grant permits
and easements for utilities “subject to the exclusive rights of a
Telecommunications Provider”); id. § 4.7.1 (HOA may provide “additional
services” to owners “[s]ubject to the exclusive rights of a
Telecommunications Provider pursuant to one or more exclusive easements
encumbering the Property”); id. § 8.1.3 (developer creates utility easement in
Property “subject to the exclusive rights of a Telecommunications Provider
pursuant to one or more exclusive easements encumbering the Property”).
10

The TSA in turn makes the CC&Rs “a binding obligation of the HOA,”
and the HOA “covenants not to amend the CC&Rs such that the amendment
would…have a materially adverse effect on [OpenBand].” TSA § 6.4(l).

B. Decision Below

In 2011, Lansdowne HOA, now representing residents of Lansdowne
and no longer controlled by the developer, filed suit in the U.S. District Court
for the Eastern District of Virginia against OpenBand, its parents and
affiliates, and the developer. The HOA brought a number of claims for
damages and declaratory and injunctive relief centering on OpenBand’s
exclusive arrangement to deliver Platform Services. Complaint 33-46. By
June of 2012, only a claim for declaratory and injunctive relief under the
FCC’s Exclusivity Order remained.
On cross motions for summary judgment, the district court found that
the contractual arrangement in place between Lansdowne HOA and
OpenBand, including the TSA, easements, and CCRs, constituted an
exclusive right to provide video programming services in violation of the
Exclusivity Order. The court accordingly granted declaratory relief that those
clauses were null and void and enjoined defendants from enforcing them.
Op. at 34. The court found that 47 U.S.C. § 401(b) provided a private right of
action because the Exclusivity Order “specifically defines the rights and
11

obligations that a litigant can enforce,” Op. at 17, as contemplated by this
Court’s decision in CGM, LLC v. BellSouth Telecomms. Inc., 664 F.3d 46
(4th Cir. 2011). It then found that OpenBand was subject to the Exclusivity
Order as an OVS operator both because the defendants including OpenBand
constituted a “group of persons” whose activities fell within the statutory
definition of OVS operator, and alternately because OpenBand itself
“provided” MVPD services by controlling the OVS operator Multimedia.
Op. at 22-25.
Finally, the court found that the Exclusivity Order governed the
arrangements in question. Defendants had argued that the Order reached
only contracts and not easements, that the TSA was the only “contract” at
issue, and that the TSA did not directly prohibit residents from contracting
with MVPDs other than OpenBand. The court disagreed, finding that the
Order “provide[s] strong evidence that the FCC issued its Order in
contemplation of its application to precisely the type of exclusive easement
granted to OpenBand.” Op. at 30-31. In the alternative, the court concluded
that the TSA, CC&Rs, and easements were “inextricably related” and entered
into “for the purpose of establishing a unitary contractual matrix of
interlocking obligations that create an impregnable, exclusive enclave for
12

OpenBand’s delivery of wired telecommunications services at Lansdowne.”
Op. at 28.

SUMMARY OF ARGUMENT

Under the arrangement put in place by appellants and the developer,
only OpenBand and its affiliates can provide wireline video programming to
Lansdowne residents. As the district court found, that is precisely the type of
anti-competitive arrangement forbidden by the Exclusivity Order. This is true
even though the exclusivity is effected in part by an easement, because the
Commission clearly intended to reach easements with its Order. Moreover,
the Exclusivity Order reaches OpenBand as an OVS operator, because
OpenBand and Multimedia are a “group of persons” that together own and
control an OVS and use it to deliver video programming. The decision below
10
should be affirmed.

10 The Commission agrees with the district court and the appellee that the
Exclusivity Order is an “order” that may be enforced under 47 U.S.C.
§ 401(b). It is well settled that a Commission “order” under section 402 of
the Communications Act includes rulemaking orders “which affect or
determine rights generally even though not directed to any particular person
or corporation.” Columbia Broadcasting Sys., Inc. v. United States, 316 U.S.
407, 417 (1942). There is no reason to think that the term means anything
different in the immediately preceding section of the Act. See Chesapeake &
Potomac Tel. Co. of Maryland v. Pub. Serv. Comm’n of Maryland
, 748 F.2d
879, 881 (4th Cir. 1984), vacated on other grounds, 476 U.S. 445 (1986). In
any event, the Exclusivity Order sets out the “specific rights and obligations”
of MDU owners and OVS providers, and thus is enforceable under the
standard enunciated by this Court in CGM, 664 F.3d at 54.
13

ARGUMENT

I.

THE EXCLUSIVITY ORDER

FORBIDS EXCLUSIVE
ARRANGEMENTS LIKE THOSE AT LANSDOWNE.

A. The easements completely prevent competition by other

video programmers.
OpenBand has an “exclusive easement” to “Administer” “Utilities” at
Lansdowne. OpenBand Easement § 2.1(a). This easement is “reserve[d]
solely” to OpenBand, so that “no other person or entity shall be entitled to
Administer any Utilities on, under or across the Property without the written
consent” of OpenBand. Id. § 8. The easement also contains the HOA’s
agreement that it will not grant an easement to Administer Utilities to anyone
else that would be inconsistent with OpenBand’s exclusive rights. Id. In
other words, no other utility operator, including any wireline MVPD, can get
access to property controlled by the HOA for the purpose of providing video
programming to Lansdowne residents. Such an arrangement indisputably
“prohibit[s] any other MVPD from any access whatsoever to the premises of
the MDU…real estate development,” Exclusivity Order ¶ 1 n.2.
OpenBand denies that the easements “‘absolutely’ prohibit access to
Lansdowne” because OpenBand has the right to grant subeasements, raising
the theoretical possibility that OpenBand might grant a competitor access to
Lansdowne. Br. at 30. OpenBand does not represent to the Court that it has
or would grant such a subeasement. In any case only OpenBand—not the
14

property owners or HOA—has the right to grant or deny access to a
competitor. That is, OpenBand has the right to “prohibit any other MVPD
from any access whatsoever” to Lansdowne, precisely as forbidden by the
Commission. Exclusivity Order ¶ 1 n.2.
OpenBand also points out that the TSA purportedly grants homeowners
the option to contract with an alternate provider. Br. at 9. Because the
exclusive easement would prevent a provider from even reaching a
homeowner, the option is meaningless.

B. The Order

reaches easements like those at issue.
Even though this arrangement seeks to exclude competition
completely, OpenBand argues that the FCC did not intend to reach it because
11
it is effected in part through an easement. As the district court noted, “it
would be anomalous that a provider of video programming services could so
easily evade the FCC’s broad and comprehensive remedial order merely by
structuring its prohibited exclusivity as defendants have done here.” Op. at
32. There is absolutely no reason to think that the Commission intended to

11 As the district court also found, the CC&Rs and the TSA in combination
with the easement also form a “unitary contractual matrix of interlocking
obligations” that serve to exclude access by competitors. Op. at 28. Because
the Exclusivity Order reaches the easements directly, this court need not reach
that issue, but the Order certainly should also be read to reach contracts that
incorporate exclusive easements.
15

set up such a regime. As the present case shows, such an exception would
swallow the rule.
This commonsense point is amply fortified by the record, which shows
that the Commission considered, and intended to ban, exclusive easements of
this type. In describing the type of “exclusivity clause” that the rule would
reach, the Commission cited to comments from AT&T. Exclusivity Order ¶ 1
n.2. In these comments, two of the four examples of exclusivity
arrangements are effected through “easements.” See Comments of AT&T
Inc. at 11 & n.30, Exclusive Service Contracts for Provision of Video Services
in Multiple Dwelling Units and Other Real Estate Developments, MB Docket
No. 07-51 (July 2, 2007) (describing “broad exclusivity clauses” and citing to
exhibit entitled “Easement and Memorandum of Agreement”); id. at 12 n.35
(citing to two exhibits with exclusive rights effected through “easements.”).
Indeed, those agreements are strikingly similar in structure to OpenBand’s
exclusive easement at issue here. See id. Exh. B §§ 1, 3 (easement made in
coordination with separate contract for services; grantor covenants not to
grant easements across property to other providers); id. Exh. C § 13(a)
(grantor gives “exclusive easement in perpetuity” in property set aside for
utility service).
16

It is unsurprising that the Commission saw no reason to draw
distinctions between exclusivity arrangements embedded in easements versus
those in other contracts—appellants themselves failed to do so. In comments
during the rulemaking, Multimedia argued that its “exclusive contracts” were
essential to its ability to recoup investment. OpenBand Comments at 3-4; see
Exclusivity Order at nn.72, 76-77, 104, 116 (citing OpenBand Comments).
In fact, the comments specifically mentioned service to the Lansdowne
development. OpenBand Comments at 2. Thus, Multimedia itself treated the
Lansdowne arrangement as an “exclusive contract” for the purposes of the
Commission’s MDU exclusivity proceeding.
In seeking to show that the FCC nevertheless intended to carve out
easements from the rule, OpenBand misreads the Exclusivity Order in two
ways. First, because the Order regulates MVPDs under the FCC’s
jurisdiction and not MDU owners, the Commission stressed that MDU
owners would still be free to grant or deny access to their property to any
particular MVPD. Exclusivity Order ¶ 37. OpenBand misreads this to imply
the Commission sought to avoid impinging on OVS operators’ “real property
rights.” Br. at 31. But the Commission sought to clarify that MDU owners’
rights would be unaffected. The issue in this case is instead an OVS
17

operator’s right to limit competition. That is precisely what the Commission
intended to, and did, regulate.
Second, OpenBand cites to the FCC’s statement that, because MVPDs
will not be forced to share their physical wires with competitors, the Order
“obviously does not involve the permanent condemnation of physical
property.” Br. at 32 (citing Exclusivity Order ¶ 55). Again, OpenBand
misreads a more limited point. The Commission emphasized that MVPDs do
not need to share their physical facilities. The district court’s decision does
not mandate any such sharing of OpenBand’s physical property. Instead, the
court required that OpenBand not enforce its right to exclude other providers.
That is entirely consistent with—indeed, mandated by—the FCC’s Order.

II.

OPENBAND AND ITS AFFILIATES FALL WITHIN THE
EXCLUSIVITY

ORDER AS AN OVS OPERATOR.
The Exclusivity Order applies to Open Video System (OVS) operators.
Exclusivity Order ¶ 51. Appellants argue that it cannot apply to them because
any exclusive arrangements with the HOA are with OpenBand, which
appellants contend is not an OVS operator. But in fact, OpenBand and its
affiliate Multimedia fit easily within the definition of OVS operator, because
they constitute a (1) “group of persons” who (2) “provide[]” (3) “cable
service” (4) “over an open video system,” and who (4) “directly or through
18

one or more affiliates own[] a significant interest in such open video system.”
See 47 C.F.R. § 76.1500(b).
Appellants do not dispute that the communications infrastructure at
12
Lansdowne constitutes an “open video system,” nor that the video
13
programming provided is “cable service.” Op. at 22. Nor do they dispute
that OpenBand owns “a significant interest” in the infrastructure within
Lansdowne used to provide that programming. Id. at 23.
Finally, Openband is part of a “group of persons” that “provides” this
service. See generally Br. at 32-35. In the words of the district court,
“Neither OpenBand nor Multimedia could perform as required without the
other.” Op. at 25. Operationally, only OpenBand has an easement to run
wires to individual houses, id. at 8 n.9, so Multimedia could not actually
reach its customers without use of OpenBand’s portion of the network. And
legally, it is OpenBand, not Multimedia, that has contracted with the HOA to

12 An open video system is “[a] facility consisting of a set of transmission
paths and associated signal generation, reception, and control equipment that
is designed to provide cable service which includes video programming and
which is provided to multiple subscribers within a community, provided that
the Commission has certified that such system complies with this part.” 47
C.F.R. § 76.1500(a).
13 “Cable service” has the same definition for OVS operators and for cable
operators and, as relevant here, refers generally to the one-way transmission
of video programming to subscribers. See 47 C.F.R. §§ 76.5(ff) &
76.1500(f).
19

provide service and that bills and receives payment for those services. TSA
§§ 2.1, 5.1. OpenBand has in turn subcontracted with Multimedia to provide
certain of the video programming services “on [OpenBand’s] behalf.” Op. at
24. As the district court correctly found, “OpenBand, Multimedia [and the
affiliated entities] are contractually, operationally, and legally connected to
each other in a manner that allows them to operate as a single, integrated
provider of cable service to Lansdowne residents.” Id. at 25. The parent
company has chosen to divide the function of an OVS operator among two of
its wholly-owned subsidiaries. This cannot hide the fact that these entities
constitute a single, integrated “group of persons” that “provides” video
14
programming through an OVS.
Appellants stress that only Multimedia has applied for and been
granted certification to operate an OVS system. Br. at 34-35. In fact, when
Multimedia applied for certification in November of 2000, OpenBand did not
even exist, and so Multimedia represented that it would be operating the OVS
15
(presumably alone). That application, and the resulting certification, did not

14 The district court also held that OpenBand, in itself, “provides” service
over the OVS, and so is an OVS operator. Op. at 20-24. This Court need not
reach that issue, given the ample support for the finding that OpenBand is an
OVS operator as part of a “group” that provides service.
15 See OpenBand OVS Certification (certification granted in December
2000, while OpenBand was created in March 2001).
20

contemplate that M.C. Dean would later split off responsibility for essential
OVS functions and infrastructure to a separate entity, id. Appellants now
argue that by doing so, M.C. Dean has absolved OpenBand of all regulation
as an OVS operator, even though OpenBand is essential to provision of OVS
service at Lansdowne. That is not a reasonable reading of the FCC’s
regulations and the Communication Act. As the district court recognized,
certification is a duty of OVS operators, but it is not an element of the
definition of OVS operator. Op. at 24 n.32. The definition requires only the
provision of cable service over an OVS along with ownership or control.
That describes OpenBand precisely.

CONCLUSION

Because OpenBand satisfies the definition of an OVS operator, it is
subject to the Exclusivity Order. And because the exclusivity clauses of
OpenBand’s easements are forbidden by that Order, they are null and void.
The decision below should be affirmed.
21

Respectfully
submitted,

SEAN A. LEV
GENERAL COUNSEL

PETER KARANJIA
DEPUTY GENERAL COUNSEL

/s/ Jacob M. Lewis

JACOB M. LEWIS
ASSOCIATE GENERAL COUNSEL

MATTHEW J. DUNNE
COUNSEL

FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
October 10, 2012
22

IN THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT


OPENBAND AT LANSDOWNE, LLC, ET AL.,
APPELLANTS,
v.
NO. 12-1925
L

ANSDOWNE ON THE POTOMAC HOMEOWNERS
ASSOCIATION INC.,
APPELLEE.



CERTIFICATE OF COMPLIANCE

Pursuant to the requirements of Fed. R. App. P. 32(a)(7), I hereby
certify that the accompanying Amicus Brief for the Federal Communications
Commission in Support of Appellee in the captioned case contains 4,412
words.

/s/ Jacob M. Lewis
Jacob M. Lewis

Associate General Counsel
Federal Communications Commission
Washington, D.C. 20554
(202) 418-1740 (Telephone)
(202) 418-2819 (Fax)
October 10, 2012



12-1925


IN THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT


OpenBand at Lansdowne, LLC, et al.
, Appellant
v.

Lansdowne on the Potomac Homeowners
Association Inc., Appellee


CERTIFICATE OF SERVICE


I, Jacob M. Lewis, hereby certify that on October 10, 2012, I electronically
filed the foregoing Amicus Curiae Brief with the Clerk of the Court for the
United States Court of Appeals for the Fourth Circuit by using the CM/ECF
system. Participants in the case who are registered CM/ECF users will be
served by the CM/ECF system.


Mark D. Davis
Robert P. Charrow
Steven A. Fredley
Laura M. Klaus
Christopher J. Wright
Sanford M. Saunders, Jr. Esq.
Wiltshire & Grannis, LLP
Greenberg Traurig, LLP
Suite 1200
Suite 1000
1200 18th Street, NW
2101 L Street, NW
Washington, D.C. 20036
Washington, D.C. 20037
Counsel for: Lansdowne on the
Counsel for: Openband at
Potomac Homeowners Association,
Lansdowne, LLC
Inc.




/s/ Jacob M. Lewis

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